Bicycle Retailer & Industry Newsreported on an interesting (forthcoming) study from marketing and research firm The Gluskin Townley Group yesterday. The report compared the demographics and buying habits of buyers of used bikes versus buyers of new bikes. Here’s more from BRAIN:

Owners of bikes they bought used ride more, buy more, and visit bike shops more often than owners of bikes they bought new, according to a new study.

Used-bike owners also ride their bikes to work more often than owners of new bikes, and, in what the researchers called a big surprise, they are wealthier: 22 percent of owners with household incomes of $200,000 or more own a bicycle they purchased used, compared to 12.5 percent that own a bicycle they purchased new, said Elliot Gluskin, managing partner of The Gluskin Townley Group.

The full study is due out next month. I’ll try to track down a copy and share more.

I find this very interesting, especially given that most bike dealers do not specialized in used bikes or offer them at all. However, my hunch is that the ones that do (Sellwood Cycle Repair and Citybikes come to mind) do very well with them. Could this report mainstream used bikes? I would love to hear from used bike buyers and bike shop employees about this. What do you think accounts for this? Do these findings surprise you or validate what you’re already seeing?

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Posted on April 24th, 2012 at 9:18 am. Filed under Business, Front Page, News and tagged with , Bike Shops.
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Comments

9wattsApril 24, 2012 at 9:22 am

I find this very funny having been given all kinds of grief right here for suggesting that one could buy a used bike and come out ahead.

Not surprised. If you think about most parts of the country, people that typically buy new ride for recreation and generally do not know much about maintenance. They buy new because they want the bike that sits in their garage to be ready to go. After a few years, they sell these bikes and people that know more about cycling buy them up, repair them, and ride them.

The income part is interesting, I can only imagine that is due to the “Wal-Mart Bike effect”. Lower income individuals may be more likely to buy a cheap bike new, rather than fuss with a equally expensive, higher quality used bike.

“22 percent of owners with household incomes of $200,000 or more own a bicycle they purchased used, compared to 12.5 percent that own a bicycle they purchased new.”

So… what happened to the other 65.5%?

Also, are they only counting sales from bike shops, or are they counting large general retail stores as well (Target, WalMart, etc)? If they’re looking at all bikes sold, it makes sense that the volume of average to lower income folks buying new $99 Huffys (Huffies?) will be less wealthy than people buying $200+ used bikes. For a bike to be sold used in a shop (where they can get sales data), it has to be good enough quality to be worth reselling, and probably also have a minimum retail value to be worth the space taking up inventory. That Huffy that was bought new for $99 will go for $10-50 at a garage sale where the “used bike” transaction won’t be recorded.

I agree, my guess is that by “owners” they are referring to homeowners. But the sentence starts off with “Used-bike owners” as the subject, so it’s easy to interpret “owners” as shorthand for “used-bike owners” when the reference to “households” doesn’t come until after. It’s poorly written in general. That sentence has 65 words with six commas and a colon.

Also not surprised very much. Maybe the income thing is a bit of a surprise, but I would be curious if the “new” bikes accoununted only for bikes purchased at bicycle shops or bicycle shops and department stores.

I think a lot of people that commute on a regular basis tend to buy used as they know the bike is going to get rained on, scratched on staple racks, and generally just go through a lot more. And, used buyers are also going to spend a little more time fixing their own rides as getting into a repair shop can be expensive and so often take a while to even get an appointment.

And, while Portland does not have a lot of shops that sell used bikes, craigslist gets at least 300 postings a day for bike/parts for sale.

I wonder if they also asked about how many bikes these households own? My husband and I ride a lot (but aren’t that rich!) and have more than 10 bikes between the two of us–some of which are new and some are used. Some bikes we buy used exactly for Mindful Cyclist’s reasons–and others (race bikes) we buy new. It all depends on what we want to use the bike for.

It could be that they visit bike shops more often and buy more because used bikes have worn out parts and require more servicing. The used bikes I have bought have always cost more in the long run. My old $600 Bianchi retro project was fun but there was no way I would have ridden it without completely overhauling the headset, BB, hubs, wheels, new tires, brake pads, cables etc. I could do those things myself but if I had a shop do them it would have just about equaled the price of a new entry-level bike. Walk into Citybikes on any day and you will see customers with the most forlorn looking bikes in dire need of a complete overhaul. In the beginning not safe and in the end not cheap.

any bike will require replacement parts if it is used at all, or if it is left to rust. a forlorn looking bike in dire need of an overhaul got that way because it was not maintained — not because it was bought used.

“…if I had a shop do them it would have just about equaled the price of a new entry-level bike.” this type of calculation & derivative argument against buying something used is a familiar trope. It is not limited to bikes. It suggests that the decision to buy a new ___ is the result of a careful weighing of the two sets of costs, but in most cases with which I’m familiar the speaker’s rudimentary knowledge of the used market, or of how to repair or maintain a ___ suggests it is instead an a priori belief that buying new is more responsible/thrifty/prudent. People should buy a new bike if that is their preference–no argument there from me. What I object to, however, are flimsy ‘calculations’ that purport to show how buying a new bike is really cheaper in the long run than buying a used bike. If anyone is convinced of this then I submit they aren’t going about it in a sensible fashion and should consult someone who is familiar with used bikes and their upkeep.

Actually the costs of 2 good tires and tubes is as much as replacing the entire bike at WalMart. I kid you not we had a project at my church where we were going to refurb some old bikes with new consumables (tires, tubes and brake pads) and it was cheaper to buy new bikes than buy the parts to refurb the old bikes. You would have to get to a certain level of bike before buying new became more expensive than repairing old. That’s one of the sad reasons why I had so much raw material for my BMX to SWB ‘bent conversion business back a few years ago.

Sure, but you are comparing high quality *new* parts with a package of low quality *new* crap from Walmart. That wasn’t my comparison.

Since you mentioned tires, I maintain a whole fleet of bikes and related equipment and haven’t bought a new tire in at least a decade. Not that the tires on these bikes don’t wear out, they do. But there are so many used tires available for cheap/free I’ve felt no need to buy new.

Of course there’s a tricky logic that underlies the used market for pretty much anything. Used stuff tends to be troublingly cheap (in this extremely wealthy country of ours) because there seem always to be plenty of people who are eager to buy new and dump their no longer new stuff into the used market.

I look for tires by diameter, as in 26″. I don’t shop by width, which I assume is what the 23-28mm designation refers to. I put on whatever width is in the free bin or I can get cheap on Craigslist. Or am I missing something?

It really depends on the bicycle though. In 2006 I got a 1961 Raleigh Sports for $65, and I think I’ve put…less than $500 into it, for sure. Probably much less. And that’s including $120 for a new saddle, and $50 for a secondhand front wheel with an older dyno-hub and a new rim. So that’s, what, less than a hundred bucks per year of riding it?

Some bikes need more maintenance than others, some were treated better than others.

I’d wager there’s an element of trust/confidence/knowledge with more experienced and more invested buyers, which drives them toward what they know better (established/proven frames & hardware), and which alleviates them of (a) the uncertainty which breeds the “new is better” mentality, and (b) needing sales staff to guide their purchase.

Generally there are more maintenance issues with an older bike. That plus the apparent fact that those people ride more (racking up even more wear and tear) explains why they visit bike shops more often.

As for the other part, here’s a theory/sweeping generalization:

Seems to me buying a used bike is the mark of someone sensible, knowledgeable and “no BS,” who can assess the value not only of the bike but the money spent or saved, and who believes a bike is for its primary purpose (riding). You would expect such a person to ride more. And to the extent the sensible attitude carries over to other parts of life, you’d expect them to be wealthier.

By contrast, buying new is more (not saying “always,” just “more”) the mark of the consumerist spendthrift who buys things mainly for flash and for display, and for the purpose of spending itself. You would expect such a person to ride only to impress others with how much money was spent (something more easily done with a car anyway) and to be constantly spending within an inch of his life and always in debt.

I think the main premise needs to be flipped: “the more you ride, the more you appreciate the value of used bikes.”

One piece of anecdotal evidence. Back in ’07 I wanted a cool fixie (they were all the rage!), and bought a high-quality, well maintained track bike off CList for $400. Rode it a ton, and then sold it in ’10 on Clist for $400. Happy knees, happy wallet.

Kind of awesome how three riders in a row have basically “owned” this bike by putting down something closer to a safety deposit, which can almost surely be recouped.

Your post really points out the used bike market in Portland. Bicycles really kind of hold their value here. Especially if you are seeking a fixed (although not near as much as 2007) or an old steel framed road bike. I see late-80’s Schwinn Worlds go for over $300 on craigslist and I bought a new one in ’87 at a sporting goods store for $200.

It would be interesting if this study broke it down city by city as I do think markets are different for cities.

A friend of mine who works in a bike shop in Edmonton (Alberta) is always amazed at the prices bikes go for in Portland….where he lives, older bikes (that would sell here for close to $200) go for almost nothing. He’s found older bikes in perfect shape leaning against dumpsters.

The few sentences we know about the study so far are a frustratingly incomplete. Who was surveyed (consumers or retail shops)? Does the data include craigslist and other non-retail purchases? Are we talking about ALL places that sell bicycles and accessories, or only what most of us would consider and LBS?

Are we talking about only adult-ridden bicycles?

The part about income and “owning a bike..” could also be very misleading, it’s hard to know. Are they talking about people who own one and only one bike? What about those who own multiple bikes?

Then again I bought a 2002 LeMond Buenos Aires with Reynolds 853 & Ultegra for $650. I’ve swapped out the handlebars, saddle & pedals to something more my liking, but I do that on all my bikes anyway. Buying a Reynolds 853 frame with Ultegra new would cost me $2500 from Mercier or $3400 from Jamis.

I have 6500 Ultegra on one bike and newer 5600 105 on another. The older Ultegra shifts WAY better than the 105. I doubt the claim that the new 4600 Tiagra is as good as 6500 Ultegra, but I’d love to hear that’s true as it would make me more likely to buy new.

Still, let’s say that 105/Tiagra would be comparable. Where is the Reynolds 853 frame with those components? Most companies going to give you heavier steel tubing with those components, and it’s still going to run $1800. If you can get a steel frame at all.

I’ll concede the point that 4600 is as good as 6500 if you can show me where to find a Reynolds 853 bike that is equipped with it. The point was to find a comparable new bike, to show that buying it new would cost me 3x as much or more.

I believe the correct conclusion from the data presented is: “Wealthy households are more likely to buy used bikes than new bikes,” not “Wealthy households are more likely to buy used bikes than are non-wealthy households.”

I agree with what Rol said. I bought new bikes for my sons, but I bought my last two bikes used.

When looking to replace my commuter hybrid with a road bike, I tried a number of new bikes, but ultimately a used bike via Craigslist. I had to take it to a mechanic for a few repairs, but I ended up with what I wanted for about $300 less than new. It makes sense: I was already an experienced bike commuter, so I had an idea about what kind of frame and components I wanted. (I also knew that my previous bike lasted 21 years!)

I still have the last new bike I bought 12 years ago and enjoy riding it. I didn’t know a lot about road bikes back then and appreciated the help I got from the LBS in making the purchase. Since then I have bought all used bikes from Craigslist. Now I know what I want and am willing to wait for a deal. The markup on new, latest model bikes is painful and I don’t feel like I need the latest shiny new thing. FWIW I do the same thing on cars. You save $$ by buying something a couple of years old and avoid the instant depreciation when you drive a new car off the lot.

New bike buyers buy on a whim…used buyers are more committed. I’m surprised the local new bike shops haven’t started selling used (trade -in) bikes ..like car dealers do. with some of the new bikes in the 2k range,it makes sense.

I find this article pretty timely – I’ve been bike-shopping for a new bike for my wife and, after visiting about a dozen bike shops over the past 2 weeks, finally found something that fits her.

I’ve noticed that this is definitely the season for bike shopping – virtually every bike shop in PDX is packed full of people, and they are definitely buying.

Secondly, while we collectively own about a half-dozen bikes, bikes that get ridden do require constant, ongoing maintenance. I’ve been paying for this with my own blood & sweat as I rebuild a rusted-up grease bucket vintage Schwinn. The older a bike is, the harder it is to maintain – sometimes the solution to have shifters and brakes that actually work is to just buy a new bike!

Also, some parts just aren’t made anymore and you can’t replace them once they wear out. Then you end up with a freak bike. Things can get ugly fast.

“The older a bike is, the harder it is to maintain – sometimes the solution to have shifters and brakes that actually work is to just buy a new bike!”

It depends. For mountain bikes there were vintages that featured high quality simple, repairable components, and rather few of them (1980s). The fraction of plastic components on mountain bikes that have come along since has generally increased. Value engineering is alive and well.

As a restorer of vintage bikes from the hand built era, I can tell you that this rings true. The days of handcrafted bikes are gone and there is tremendous enjoyment and value in purchasing a restored classic hand built bike as compared to buying an off the shelf factory built bike or a hand built new custom bike. The former is money down the drain for a throw away bike and the latter is wonderful but often quite a bit more of an investment than a restored classic. It is not surprising that cyclers of means have figured this out. What would be nice would be to see riders of all income levels see the value in quality hand built used bikes.

I definitely prefer used bikes. And I definitely do not fit in the income bracket BRAIN is talking about – who are those people?

My two-cents worth? New carbon bikes are ugly. Sorry, they just are. And for long distance comfort, light skinny steel tubes can’t be beat. If you’re a car collector or aficionado, are you going to buy a new Corvette or a used one? Same with bikes. Give me an 80’s DeRosa/Merckx/Cinelli over a brand new Specialized any day.

The Community Cycling Center’s customer base is predominantly people who rely on bicycles for transportation. When you ride your bike more, the parts wear out more, and you’ll most likely be visiting a bike shop more often to either a) Buy parts to fix your bike yourself, or b) Have a mechanic repair your bicycle. So the data that shows that used bike owners visit bike shops more often rings true for us. Our used inventory changes often, which also brings in people on a regular basis who enjoy looking through our parts, and accessories.

The income level reported in the study does not match our customer base, however. There are different definitions of “used bicycle.” At the Community Cycling Center, we sell both refurbished and as-is bicycles, and we have price points for our customers on a low budget.

One thing I haven’t seen brought into the conversation is to what extent the bicycles purchased were children’s bikes. It may be that for both groups the majority of bikes purchased were children’s bikes. Then it would be quite obvious that in less well off families cheap and flashy Walmart bikes dominated. While in better off families in neighborhoods where most people buy quality and take care of it, used bikes worth buying/fixing (for children) are more widely available.

Lots of other questions about the study, that can’t be answered until the study is actually released.